What specialized structure contains hair follicles?

The dermis layer is the correct choice because it is the skin layer that contains hair follicles, along with other important structures such as sweat glands, connective tissue, and blood vessels. The dermis provides the foundation and structure for hair follicles, which extend from the dermis up into the epidermis.

In contrast, the epidermis layer is the outermost part of the skin and does not contain hair follicles; it mainly serves as a protective barrier. The subcutaneous layer, also known as the hypodermis, is primarily composed of fat and connective tissue and is located beneath the dermis but does not contain hair follicles either. The sebaceous gland, which is associated with hair follicles, produces oil to lubricate the hair and skin, but it itself is not the structure that contains hair follicles.